Real Estate news has always received prime time on our television screens and also good coverage in printed media but has there ever been a time when the coverage is as intense and as positive (from a vendor’s perspective) as we have witnessed recently? We doubt it! Not only the general public, but those of us working in the industry, are amazed at the price explosion that we have seen in recent weeks and months, and one wonders where this will all end up. Demand is so strong that there must be a temptation for home sellers to consider dispensing with the services of an agent but we urge people having these thoughts to exercise caution before making that decision. It is probably more important than ever before to select an agent and a method of sale that will maximise your opportunities and deliver to you the best possible result. On today’s market, an experienced agent will more than pay their way with sound advice, a network of contacts, superior negotiating skills and a result that takes full advantage of today’s unusually bullish market.
Let’s look at some of the considerations of a prudent homeowner when contemplating the sale of their home:
Selling Methods: There are various methods of sale and your Tommy’s agent will guide you to the method of sale that they believe will suit your circumstances best. The usual options are a sale by tender which can be with a fixed closing date or it can leave the option open for the homeowner to sell earlier if a suitable offer is forthcoming. It may be a sale by private treaty with a fixed price – although this is unlikely to be a popular option on a rising market, or it could be a sale by auction. Tommy’s are licensed auctioneers but selling by this method is more popular in Auckland, Christchurch, Waikato and the Bay of Plenty than it is in Wellington.
Pricing Your Home to Sell: Normally, the best guide is the price other similar properties in the same or similar areas recently sold for. On a rising market though, while this can be a useful guide care needs to be exercised to avoid the risk of under-selling. Some of the prices being offered in the present climate are way above expectations and it is important to have a selling process that recognises this possibility and does not stifle the intentions of a willing buyer to pay a premium price. Tommy’s firmly believes that offering a buying price guide such as, “Offers are invited over $800,000” is a sound strategy and can set the tone for a good sale. A price guide is also useful for potential buyers when assessing their prospects of buying a particular property.
Price Expectations: The media feasts on comparing sale prices to a property’s rateable valuation (RV). Tommy’s advice is that homeowners should understand that a property’s capital value is set for rating purposes. RVs are assessed periodically but usually without any form of interior inspection and can vary considerably. A RV is seldom a useful guide to a property’s current market value. There are instances of properties selling for up to double their RV but these comparisons are inconsistent and are of little value when assessing true market value. Seldom does a RV take into account upgrades that may have taken place or conversely, houses where the interior is showing a serious need for cosmetic or even more costly upgrading.
Selling Your Home Privately: As we mentioned earlier in this article, there must be a temptation to sell your own home privately. This will save you from paying a commission – but consider the down sides!
• You are unlikely to achieve competition between a number of buyers vying to buy your house. By using an agent, there is more chance of achieving a premium over and above the commission.
• It is difficult to negotiate a sale that involves your own property. Buyers are usually uncomfortable dealing directly with owners.
• Buyers with the boldness to approach sellers directly will also expect to share in the perceived savings from a private sale. They will deduct commission from the price they offer.
• You are unlikely to place advertising in the full range of media that an agency uses to capture all the potential buyers.
• It’s a known fact that experienced property investors and bargain hunters are attracted to private sales, confidant they can secure a purchase below market value.
• 99% of people are nice and won’t tell you if they don’t like your property, giving you a false impression that you have more interest than you really do!
In this highly active market, it is important that homeowners seek the best possible advice. Tommy’s are market leaders in Wellington and have been for over 20 years. We know and understand the market and believe we are your best option for seeking advice on buying and selling residential real estate. We invite you to call us without obligation.